Trump plans to create a “Foreign Revenue Service” for tariffs paid by US importers

President-elect Trump On Tuesday, it announced plans to create a new “Foreign Revenue Service” whose mission would be to collect revenue from tariffs, but economists dispute that and point out that U.S. importers are bearing the brunt of the cost of tariffs, not companies abroad.

“For too long, we have relied on taxing our great people using the Internal Revenue Service (IRS). Through soft and pathetically weak trade agreements, the American economy has brought growth and prosperity to the world, while taxing ourselves. It is time for that to change.” Trump wrote in a post on the Truth Social platform.

“Today I announce that I will create… Foreign Revenue Service To collect customs tariffs, duties, and all revenues that come from foreign sources. We will start charging fees to those who make our money through trading, and they will finally start paying their fair share. He added that January 20, 2025 will be the birthday of the Foreign Revenue Service.

Tariffs are taxes on imports, which in most cases are paid by the US-based importer to an established federal agency, US Customs and Border Protection (CBP). This dynamic has drawn opposition from economists who say the name of the proposed Foreign Revenue Service represents an attempt to hide who pays for the tariffs.

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“The president-elect may be trying to market his higher-tariff agenda as a foreign tax, but messaging doesn’t change that Higher tariffs “It will be paid by people and companies in the United States who import goods,” Erica York, vice president of the Tax Foundation, told FOX Business.

“Tariffs are not foreign revenues; they are taxes on American importers that reduce the American economy and American income. Higher tariffs will be a burden on the American economy and threaten to offset the benefits of tax cuts elsewhere, and should not be relied upon as a major source of Tax revenuesYork explained.

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Scott Lincecome, vice president of public economics at the Cato Institute, expressed similar sentiments and told FOX Business: “The agency’s name represents more branding than substance — and a misleading branding at that. In the vast majority of cases, the parties were in the United States — not Foreign (‘offshore’) sources – pay US tariffs and, as several recent studies have confirmed, bear their economic impacts as well.

“So declaring tariff revenue ‘offshore’ would be just as misleading as declaring, say, domestic sales tax revenue ‘offshore’ because it applies to a foreign-made good being sold at your local Walmart. Ultimately, Trump said, ‘Offshore.’ “It may be called the ‘foreigners’ tariff-paying agency,’ but it won’t change the fact that Americans already are.”

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During his successful campaign to return to the White House, Trump promoted plans to impose across-the-board tariffs of 10% or 20% — as well as larger tariffs of 60% on goods Imported from China.

He also threatened to impose customs duties of 25% on goods coming from Canada and Mexico, both of which are parties to the agreement. United States-Mexico-Canada Agreement (USMCA) – The free trade agreement negotiated by Trump during his first term as the successor to the North American Free Trade Agreement (NAFTA).

for him Campaign platform It included income from tariffs as a source of tax revenue to offset proposed tax cuts and spending plans.

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Trump is scheduled to be inaugurated for his second term as president on Monday, January 20. His transition team has indicated that it plans to sign a list of… Executive orders Upon taking office, as new presidential administrations often do.

Trump’s social media post indicates that the Foreign Service of Revenue will be established in Opening dayalthough details about whether this will be done through executive order and how the new agency plans to operate are unclear at this time.